UBS Group Retains Outperform Rating at RBC Despite TBTF Regulatory Concerns
UBS Group AG (NYSE:UBS) ranks among the best fundamental stocks to buy according to hedge funds. RBC Capital retained its Outperform rating on UBS Group AG (NYSE:UBS), but reduced its price target for the Swiss banking behemoth from CHF31.50 to CHF29 on June 19. The move appears as a response to the current 'Too Big To Fail' (TBTF) regulatory plan in Switzerland, which RBC Capital believes to be a 'worst case' situation for the bank.
RBC Capital cites the proposal's longer implementation period as a mitigating factor, indicating that UBS might absorb the regulatory changes without further reducing shareholder payouts. Although the new price target is still higher than UBS's current share price, the firm's valuation methodology was modified to account for what it refers to as a 'harsher outcome' on deferred tax assets and software.
While acknowledging that it will 'take time to have full visibility' on the situation, RBC Capital believes there is potential for a better result for UBS Group AG (NYSE:UBS) despite immediate regulatory challenges.
Global financial services company UBS Group AG (NYSE:UBS) offers a range of services, including investment banking and wealth management, to individuals, businesses, and institutions.
While we acknowledge the potential of UBS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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